Bill Gates set some tight deadlines for Microsoft’s efforts to catch up to Google on the Internet (tip of the hat to Peter Da Vanzo) over the past two years. However as the San Jose Mercury News reported (subscription required), these efforts do not seem to be paying off. Here are some key figures:
According to comScore Media Metrix, the total unique audience that visited Microsoft’s U.S. Web sites in December 2006 was roughly 117 million, unchanged from the previous year. Google is fast catching up, with its number of unique visitors up 21 percent to 113 million.
Microsoft’s Internet slide is reflected in its online sales. During the quarter ended Sept. 30, sales for the online business unit were $539 million, down 5 percent in a year. Google, in cruel comparison, reported revenue of $2.69 billion, an increase of 70 percent.
Google is naturally pleased about their progress but is avoiding crowing over Microsoft’s misfortunes. In the Economist magazine, Google Chief Executive Eric Schmidt suggested that open Web-based standards would “sweep aside the proprietary protocols promoted by individual companies striving for technical monopoly” in 2007. “The past few years have taught us that business models based on controlling consumers or content don’t work,” Schmidt wrote.
That’s one view of history. I’m not sure that this is what history is showing. Google has a great search tool and that is the driver of the company’s success. It’s fast, it indexes new information fast and it has a very ‘usable’ interface that couldn’t be simpler. In reality the actual search relevance is difficult to measure. It’s almost like buying detergents. What has counted up till now is the packaging and Google packaged it best.
The interesting aspect of all this is that Google really doesn’t do marketing, and nor does Microsoft. By this I mean marketing that puts the customer in the driving seat (pull marketing) rather than old style push marketing. This is unlikely to change very fast so 2007 is likely to be an extension of recent trends. Google will continue to benefit from its past momentum and Microsoft will struggle to keep up.